Multiple Choice
With fixed exchange rates,assume that the home currency becomes overvalued.To maintain the fixed exchange rate,the home country's central bank must
A) purchase the currency,and as a result it loses international reserves
B) purchase the currency,and as a result it gains international reserves
C) sell the currency,and as a result it loses international reserves
D) sell the currency,and as a result it gains international reserves
Correct Answer:
Verified
Correct Answer:
Verified
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